Investigating the Factors Influencing Carbon Credit Pricing Among International Carbon Offset Program

Climate change is a pressing global concern, primarily due to the accumulation of greenhouse gases in the atmosphere, which causes various damaging effects on our environment, such as rising temperatures, melting ice, and more frequent extreme weather events. Global efforts to mitigate climate change and encourage sustainable behaviours heavily rely on the carbon credit market. Understanding the value and volatility of these credits is crucial for market participants and policymakers as the demand for carbon credits increases. Few studies have thoroughly examined the factors that collectively interact to affect carbon credit pricing. This study intends to investigate the variables affecting carbon credit market volatility and pricing and the prices of carbon credits among international carbon offset program, and a literature review was conducted to achieve the research's objectives. Furthermore, a quantitative regression analysis was conducted to investigate the relationship the prices of carbon credits, emissions, and energy prices. Historical and current data on carbon credit prices, trading volumes, and market patterns are investigated using market data analysis from several international organizations. The findings demonstrate the interaction emissions and energy prices. However, the prices are predominantly influenced by the emissions of greenhouse gases. As these emissions increase, the costs of carbon credits also rise. Moreover, the carbon offset ranging from US $0.64 to US $160/MtCO2e, with Thailand offering the lowest and Switzerland the highest prices. Additionally, this study offers insights into the risk management procedures used by organizations trading in carbon credits, assisting in the development of a more sustainable carbon credit market.